SEC Seeks To File New Charges Against BofA On Merrill Deal, Full SEC Letter Attached

The Securities and Exchange Commission is seeking permission to add new charges against Bank of America for failing to disclose Merrill Lynch's "extraordinary losses" in time for the shareholder vote on its takeover.

According to the SEC's letter, by the time shareholders voted on the Merrill deal December 5, 2008, Bank of America was aware that Merrill had suffered $4.5 billion in net losses during October and had estimated an additional multi-billion-dollar loss for November.

The SEC alleges that those losses constituted more than one-third of the deal's value and approximately 60% of Merrill's entire losses in the preceding three quarters, representing a fundamental change to the deal.

"Nevertheless, despite its representation that it would update shareholders, BOA kept them in the dark as they were asked to vote on the proposed merger," the SEC said in its letter to the judge.

The SEC said failing to make new disclosures about the losses "violated BOA's express undertaking to update shareholders of fundamental changes," making the proxy disclosures "false and misleading."

Bank of America said in a statement Monday: "We are disappointed that more than two months after the court-imposed deadline to amend its complaint and in the absence of any new information, the SEC now at the 11th hour is nevertheless trying to add new charges. With a trial set to begin in approximately six weeks, this would materially hinder our ability to mount a defense.

This is laughable. Everyone knows GS/JPMorgan/Chase/Rockefellor/Bush/Clinton crime syndicate twisted BOA's arm to accept the Meryl Deal. BOA was the only bank that could give them a problem with their plans going forward.

Big deal. The S.E.C. still hasn't amended the complaint to add any parties, e.g., Ken Lewis, Ed Herlihy, Ben Bernanke, Hank Paulson. That's plainly what Judge Rakoff had in mind when he crafted the case schedule of 9/22/09. Now that the 1/2/10 discovery deadline has passed, it's too late.

Don't forget the Fed's and the Treasury's involvement in this scam. New York Atty. General Cuomo stated in an open letter to Congress that BoA CEO Ken Lewis was acting under orders of Bernanke when he failed to disclose this information.

To TD:While we are at it,may be you can present another challenge to the SEC as to why this company saw a bullish option activities on DEC 29 per Seeking Alpha:"MMR saw bullish order flow on Dec 29, when shares were at $8.51, and Nov 30, when the stock was around $7.35. Of course,so long as there is a significant departure from the mean options volume(I wish I had access to those data,then I would have done the work). By the way,the company jut announced some discovery today and suddenly they are trading at around $14